Amcor plans to buy two more China factories

WUXI, CHINA (Jan. 4, 12 p.m. ET) — Australian flexible packaging giant Amcor Ltd. said it plans to acquire two film packaging plants from China’s Shenda Enterprise Group, expanding its footprint in the country to nine factories and more than 2,600 workers.

The factories, in Jiangsu province near existing facilities for the Amcor Flexibles Asia Pacific unit, will focus on multilayer films and printing for the snack, pharmaceutical and personal care markets, the company said in a statement.

“The signing of this memorandum of understanding highlights our commitment to growth in the emerging markets, and is yet another opportunity for us to build on our expertise to deliver innovative packaging solutions for our customers in high growth markets and beyond,” said Ralf Wunderlich, president of Amcor Flexibles Asia Pacific, in a statement.

A statement on the website of the government of the city of Wuxi, Jiangsu, where Shenda is based, said Amcor and Shenda had reached agreement to “jointly build” a US$120 million (748 million Chinese yuan) flexible packaging development center in Wuxi.

The facility will focus on research, development, production and sale of aluminum foil nylon composite materials, along with special bag-making, printing and “soft plastic” films, according to the Wuxi government statement.

The Amcor statement does not mention any packaging development center for the two companies or give the size of the investment. The Wuxi statement, for its part, does not mention Amcor acquiring any Shenda operations.

Both statements are dated Nov. 22. Amcor’s statement was not on its website but was provided when Plastics News asked questions about the Wuxi government announcement.

Amcor said in its statement that the non-binding agreement between the two companies was expected to close “in the coming months.”

The Wuxi statement portrayed Amcor’s decision to invest in a packaging center with Shenda as a vote of confidence in the local ports and would help upgrade local industry.

The two new Amcor facilities would continue a recent pattern of investment by the company in China.

It said in its last annual report, covering the year ending June 30, that it had bought out partners in two joint ventures in China in that year, in Chengdu, Sichuan province, and Beijing, and it said sales rose 13 percent in the country in those 12 months, led by capacity expansions.

In its most recent annual report, the company noted opportunities in healthcare and high barrier film packaging in China, among other markets there.

Shenda claims to be the largest maker of flexible packaging in Asia, with 250,000 tons capacity in several factories in China, processing materials including biaxially oriented polypropylene and PET films and specialized multi-layer co-extrusion films. It claims a 35 percent share of China’s tobacco packaging market and also has investments in finance, real estate and hotels.